European Parliament Library

What Explains Persistent Inflation Differentials Across Transition Economies?, Mark Flanagan, Felix Hammermann

Panel estimates based on 19 transition economies suggests that some central banks may aim at comparatively high inflation rates mainly to make up for, and to perhaps exploit, lagging internal and external liberalization in their economies. Out-of-sample forecasts, based on expected developments in the underlying structure of these economies, and assuming no changes in institutions, suggest that incentives may be diminishing, but not to the point where inflation levels below 5 percent could credibly be announced as targets. Greater economic liberalization would help reduce incentives for higher inflation, and enhancements to central bank independence could help shield these central banks from pressures
Table Of Contents
Contents; I. Introduction; Figures; 1. Inflation in CEEC and CIS, 2001-05; II. Could the Inflation Differential Simply Be a Statistical Artifact?; Tables; 1. Estimates of Inflation Bias in Advanced Economies and the Czech Republic; 2. Weights of Sectors in CPI, 2001-05; 3. Inflation Based on Different Weights: Russia, Ukraine, Belarus and Moldova, 2001-05 ..; III. Modeling the Inflation Differential; 4. Government Stability in Transition Countries, Averages 1999-2003; IV. Empirical Methodology and Results; 2. Terms of Trade; 3. Crop Production
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (34 p.)
Specific Material Designation
Form Of Item

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